Mall’s new owners plan 2014 opening

They say the former Blue Mountain Mall holds potential to recapture sales tax dollars going to the Tri-Cities.

The former Blue Mountain Mall sits vacant.

The former Blue Mountain Mall sits vacant. Photo by Greg Lehman.

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WALLA WALLA — By this time next year, you may be able to stop by the old Gottschalks building for a new pair of shoes. Perhaps a tennis racket. Or an outfit for date night.

Although they can’t yet say which it will be, the new owners of the former Blue Mountain Mall site, who were in town Wednesday to scope out the property and meet with city officials, say their first redevelopment will take place in the buildings that are already whole.

“Reusing those buildings will be a lot quicker,” said Alan Gottlieb, the California-based real estate developer and president of Real Estate Affiliates.

In a purchase that closed last month, Gottlieb, codevelopers with L.A.-based Zelman Development Co. and a third partner with Somera Capital Management, bought the commercial property under a new limited liability company called Zelman Walla Walla LLC.

The first question after about five years of seeming stops and starts at the Rose Street site that also borders Poplar Street and Myra Road: Is this finally for real? Will the property actually be redeveloped and Walla Walla see the return of more regional and national shopping selections lost during the deterioration of the mall?

All signs point to yes.

Zelman’s specialty includes developing suburban office and large “power” retail shopping centers. It has long-standing tenant relationships with companies such as Target, Best Buy, Lowe’s Home Improvement, Home Depot, Linen’s N Things and Kohl’s. Its website includes a showcase of development success stories. The owners acknowledged the Walla Walla property as one of their more unusual finds.

“It’s a pretty unique position to be partially constructed like that,” said Zelman Development Co. Co-president Paul Casey.

Secondly: What’s coming to Walla Walla?

That answer is not yet certain. Nor is it public yet, owners say.

“What we’ve been working on so far is: one, understanding the property, and two, finding potential users,” Gottlieb said during a quick lunch downtown before catching a departing flight.

The steps include identifying potential users, completing negotiations and then submitting plans to the city, said Brett Foy, Zelman Development Co.’s other co-president.

“That’s the key to bringing the users to the site,” Foy said.

Negotiations with potential tenants are in the works. The owners are mum on naming who might be coming in but said ideal candidates are those not already in the marketplace. Included on the list of businesses in talks with Zelman Walla Walla are a grocery store, sporting good retailer, soft-good tenant/apparel shop, shoe retailer and a restaurant.

The new owners, who bought the property from Key Bank subsidiary OREO Corp., said the site holds potential to recapture sales tax dollars going to the Tri-Cities.

“This should be the hub,” Gottlieb said.

Zelman Development Co.’s other co-president, Paul Casey, said retail development simply hasn’t been in great demand since the start of the recession. The interest from potential tenants is a sign of recovery and a brighter retail future for the community, he said.

Although Walla Walla has seen very little population growth in the recent years, the developers believe the surrounding area is large enough to support new retailers without sacrificing what’s already here.

“Different retailers have different ways of looking at the market,” Foy explained.

Although the population of the county is between 55,000 and 60,000, retailers may estimate the property’s reach to be closer to 75,000 or 100,000 people when they factor in regional communities that also have less access to stores.

The new owners plan to develop the site in phases. The first will be re-use of the buildings that weren’t demolished. That may also include construction of a separate 12,000-square-foot building. It remains uncertain whether the Poplar Street pads that were partially constructed before a previous owner lost financing can be used or will need to be demolished.

Zelman Walla Walla intends to have tenants moved in and open for business by September 2014.

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